SAP intercompany billing

Challenge

Accenture’s reliance on a global workforce model to provide services in strategy, consulting, digital, technology and operations, generates substantial intercompany activity. To manage this activity, Accenture initially used a custom solution. Intercompany invoices were processed in batch at the end of each month, and time-consuming manual processes were used to reconcile and settle invoices. Given the planned organic growth, Accenture identified that the custom solution would not scale with the business.

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Strategy and Solution

In response, Accenture implemented an end-to-end automated intercompany solution in tandem with the implementation of its single, global SAP® ERP system. The intercompany capability in the SAP software was one of the key value drivers behind Accenture’s ERP system selection.

To develop a comprehensive design of the solution, Accenture had an exceptional level of interaction, partnership and ownership between the internal IT organization, and the tax, controllership, treasury, and client accounting functions. With a heavy focus on the business processes and internal controls to support the business strategy, the design and build of the solution complemented these strategic efforts.

At the core of Accenture’s intercompany billing solution are standard SAP software components—Dynamic Item Processor, Sales and Delivery Resource-Related Billing, Pricing Procedures and Conditions and Material Master. Although the guiding principle was to use standard SAP functionality as much as possible, minor customization was required to accommodate the scale and complexity of Accenture’s business.

The resulting intercompany solution reads financial postings from the SAP system and identifies intercompany activity based on the nature of the transaction and entities charged. It automatically creates intercompany receivables, payables and the associated intercompany revenue and expense postings. Accenture’s intercompany solution properly records invoicing and settlement activity in both functional and global currency, thereby leveraging standard SAP functionality to record foreign currency gain/loss.

In addition to the SAP system, Accenture implemented custom intercompany billing solutions for royalties, central training, cost sharing and share-based compensation. These custom systems source information maintained outside the SAP system, create intercompany billing journals and interface them into the SAP system where they are invoiced and settled. For example, the Cost Sharing application enables Accenture’s tax organization to define pools of internal costs, including detailed narrative describing the cost pool and the base on which the cost pool is billed to legal entities.

Accenture deployed the SAP Treasury module, which brought Accenture onto a single treasury system. As part of this effort, Accenture automated the settlement of intercompany invoices using in-house banking. Because intercompany billing customization was minimal at the outset, compatibility among the standard SAP modules was maintained, enabling the settlement process to occur easily and smoothly.

Today, Accenture operates in more than 400 legal entities that span 86 countries. The complexity of the business has increased both in terms of the scope of products and services that Accenture provides to clients and the global nature of its projects and commercial arrangements. In fiscal year 2018, Accenture’s workforce of 459,000 generated millions of intercompany activity. The automated intercompany solution continues to scale with the increased volume of intercompany activity. Additionally, Accenture upgraded its single global SAP instance to SAP S/4HANA®, including the successful integration of the intercompany solution.

“The true value of Accenture’s intercompany solution,” notes Jamey Shachoy, Accenture Global Tax Managing Director, “was born out of aligning process and technology to support our tax strategy.” The result is an IT solution that is compatible with Accenture’s legal agreements. This capability allows automated intercompany billing and eliminates the need to maintain pricing between countries for each internal activity or client engagement.

Accenture reconciles all intercompany accounts at the transaction level and resolves elimination errors before the end of the month, preventing delays in the monthly close process and enabling automated settlement.

Accenture’s investment in intercompany solutions and processes has enabled it to scale the business dramatically, without scaling the support organization.

Today, Accenture has an automated, robust and stable intercompany solution that has grown with the business. It is flexible enough to accommodate change as demonstrated by Accenture’s move to the New with its upgrade to SAP S/4HANA.

"Several factors contributed to the successful deployment of Accenture’s Intercompany solution. Among these were the strong partnership between the finance and IT organizations, Accenture’s deep skills in delivering SAP solutions, expert functional knowledge and rigorous solution delivery methodology."